This post is, like many a blog, written largely as a bread crumb — a way to track my thinking. In the weeks since closing the sale of StackStorm to Brocade I’ve set off on a great adventure — getting to know many more entrepreneurs and investors while attempting to sharpen my understanding of relevant domains and technologies.

My goal is simple — I want to learn to pick opportunities better. And while doing so I want to help entrepreneurs and learn a lot.

This blog covers the discipline I’m attempting to follow in evaluating opportunities. My next blog will cover some of the opportunities I’m uncovering.

Picking:

Josh Kopleman from First Round (@joshk) has a great series of tweets recently on the importance of picking for entrepreneurs as well as investors. One of my favorite tweets:

Yes, +100. So how does an entrepreneur pick?

(Please, please correct and expand my thinking here.)

The $1bn bar. Michael Porter in effect.

The trick is to find opportunities that you *know* can create a space or at least become a winner in a space that is large enough that you’ll be worth $1bn with growing revenues in less than 10 years.

OK, once again, how? How do you make that determination? In my case, I write-up 5 forces frameworks. And I have a lot of question marks in the key areas that I seek to fill in through conversations and education. I’m hopeful that these write-ups will themselves become breadcrumbs that will help me and the entrepreneurs I’m supporting.

I tend to drill in on ecosystem and community dynamics because I’ve been somewhat successful in understanding and leveraging these areas. I am extremely confident in my ability to see how hard or easy it will be to get a community and a channel going.

And here is one spot where a VC — who has lots of advantages versus me in picking including an infinite network — does not have something I do have: years of experience in actually doing the work. It is easy for me to go from a) potential space to b) community dynamics to c) relevant partners and d) a team than someone who is looking at many, many opportunities.

The judo I typically try is to define a space and to start to market that in my discussions with potential teammates, investors and users. Also something that has been helpful for me in the past is to think about a tag-line for the space — think of the space itself as a product worthy of positioning.

Once you find such a space — one that you can both help create and that you are confident is worth billions — then claiming leadership of it is pretty straightforward. Think software defined storage and Nexenta or event driven automation (still young) and StackStorm. We were able to seize leadership of those spaces (for better and worse) because I had helped to create them.

2. Personas

While arguably you could subsume a focus on personas as one part of the 5 forces framework, I choose to break these out.

A focus on who are the users, where do they hang out, what do they believe, how are they changing is all important. This does not necessarily mean that you need to be one of them. However you do need to know the secret handshakes. Only by getting inside their head can you become the natural choice for them.

Yep, I’m talking design from the get go. If an entrepreneur pitches me an idea and yet does not engage with me on who exactly is the user and how is that profile changing over time, well, at the very least they need a lot of help.

I’m working with one company that has recognized that developers have become all important to their adoption. And yet they have not yet unpacked what that really means for the self adoption journey from hearing about them through initial usage and support and so forth.

3. People

At this stage of my career it almost goes without saying however the people need to be people I want to spend years with -> I’m going to help them achieve their dreams, will I care about them, respect them, go the extra mile for them and with them?

Also, not quite the same point, but the more I do this the more I understand the importance of taking the time to shake and grow the network to find the penultimate list of experts as teammates and as initial users. If I were thinking about a start-up focused on public government I’d be looking to get on the President’s calendar. And if you cannot get to that level then something is wrong either with the idea, your pitch and positioning, or — your passion.

4. Passion

At some point something should click. For me I imagine betting absolutely 100% of everything on the idea, including the next 5 years of my life. Will I bet my daughter’s college fund on this idea, team, and opportunity? If so then I know I’m onto something worthy of all out effort. If not, then I owe it to myself to not dive in and to help the entrepreneurs see what at least for me is missing. As an aside — note to self — if I don’t chase at least a small percentage of the entrepreneurs away by being too direct and candid, then I’m being too nice and wasting everyone’s time.

For those following closely you might have noticed that this boils down to 4Ps: Porter (i.e. the space and 5 forces), Personas, People (focusing on the team and early user)and Passion.

In the next post I’ll highlight a few of the spaces I’m learning about and companies I’m helping or at least trying to help.

As a bit of foreshadowing, I’m trying to improve my extraordinarily rusty coding skills — doing some python hackery — and am fascinated by opportunities being created by machine intelligence, serverless computing (and other aspects of the AWS effect), non volatile memory, and more. I also think DevOps has a long, long way to go before becoming mainstream, which is both a shame and a huge opportunity. And I’m wrestling in a few cases with whether a company should focus on picks and shovels or whether they should be mining the gold themselves.

- Written by Evan Powell, Founding CEO of Stackstorm and Nexenta, and Advisor / Angel investor in a few Alchemist companies including TextIQ and Data Fellas.